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THE ROAD TO FIGHTING OFFSHORING:
Keeping Tech Jobs in the Country
February 8, 2005 
Forget India for low-cost computer workers.
Try Greenville, N.C., or rural Arkansas, West Virginia and other U.S. locales where
lower living costs keep wages below urban levels.
That's the business premise of Kathy Brittain White's Rural Sourcing Inc., which is
coming to Eastern North Carolina this spring with its third information-technology
services center. White, formerly the top tech executive for a Fortune 100 company, is
hiring now for the Greenville site. She expects to open May 15 with about 15 computer
programmers and eventually grow to 100 workers.
"We've seen the huge increase of offshoring to other countries," said White, who lives in
Chapel Hill. "I thought, why not rural America?"
RSI, while still tiny, is a leader in a fledgling trend of tapping IT talent in areas where
wages are much lower than in Silicon Valley and other high-tech centers. Last month, for
example, CIBER, a Colorado-based, global IT firm, opened its first low-cost "made in
America" site in Oklahoma.
The move of white-collar work to low-wage workers abroad, called foreign outsourcing
or offshoring, has been growing for several years. By 2015, as many as 3.4 million U.S.
jobs and $151 billion in wages could be lost, according to estimates by Forrester
Research Inc.
RSI and competitors could be a foothold in retaining IT jobs. Even rural wages can't
match programming rates in India and elsewhere, but RSI and others pitch a combination
of lower costs, available work force, proximity, and similar time zones and language.
"It's very viable because it simulates low cost ... and, most importantly, you don't have
any of the privacy or data-protection issues you have when you cross the borders," said
Atul Vashistha, a former colleague of White's and co-founder of neoIT, California
outsourcing consultants.
For White, RSI taps her deep rural roots, risk-taking bent and the know-how of a long IT
career.
Now 55, she was born and raised in Oxford, a northern Arkansas town of fewer than 200
people at the time. She married right out of high school, took some college courses and
worked as a secretary, clerk and wallpaper hanger. In her mid-20s, broke and pregnant with her second child, she was ready for a change.
"I decided if my future was going to be different it was up to me," she said.
She enrolled at Arkansas State University, missing just three days of school to give birth.
In 1981, after five years as a full-time student, she had completed her undergraduate
degree, an MBA and her doctorate in business education. She also divorced that year and, with just $400 to her name, moved with two children to North Carolina to become an IT professor at UNC Greensboro.
"We had been broke so long, I did not know how scary that really was," she said.
The seeds of RSI were planted when she started a program to help the university's IT
grads find jobs in a tight market. After 10 years at UNCG, White moved to the corporate
executive suite, starting in 1991 at Greensboro textile-maker Guilford Mills. She moved
rapidly through higher IT positions at larger companies, garnering national IT awards.
In 1999, White became chief information officer for Cardinal Health, a pharmaceutical
drug distributor that ranked 17th in last year's Fortune 100. While in that post, she began
"virtual internships," which enabled IT students at small universities to get work
experience, via the Internet, with a huge company.
The internships were a great recruiting tool, allowing both sides to get acquainted, but
White found that about three-fourths of the students didn't want to leave their
communities.
"If they can work remotely when they're in school ... why can't we also have centers and
let them keep working?" White said she wondered.
Early in 2003, she quit the security and six-figure paycheck at Cardinal Health to put that
idea to work. White started RSI in her home state, opening her first IT center in June in
Jonesboro.
A major obstacle to growth could be finding enough people with the right skills to build
centers large enough to handle big contracts, said Vashistha, who worked with White at
Cardinal.
"She could have just sailed away into the sunset," he said. "She's taken on a cause that is
absolutely right. It absolutely has a place in the global sourcing arena, but it is not easy to
do."
White partnered with her alma mater to help students land jobs at the center. So far, the
site has about 20 workers, mostly programmers, doing work that ranges from updating
clients' existing software to creating programs for new applications. A second site in
southern Arkansas has about 10 employees.
Greenville is RSI's third site, with a fourth likely in West Virginia. White plans 50
centers.
Charlotte, the nation's No. 2 banking center, ranks high for client potential because
financial services are heavy IT users and also lead the move to offshoring. White's highlevel
IT career provides a network of potential clients. Cardinal recently began a pilot
project with RSI, including some programming work.
The company wants to see if RSI is a good alternative to "high-priced local resources or
lower-priced resources halfway around the world," said Rich Gius, a Cardinal Health
senior IT vice president. "There may be a fairly cost-effective labor pool that can be
identified on the shores of our country, but in places IT leaders are not accustomed to
going."
White hasn't yet set wages for the Greenville area. She said typical billing rates to clients
range from $38 to $50 an hour. Comparing rates is tough because they depend on
experience, demand for specific programming skills and other skills, such as knowledge
of a client's industry.
Geographic rate differences can be substantial. For example, a business analyst, a
position available at RSI, could fetch as much as $93.22 an hour in New York, according
to People Ticker, a real-time, national wage data-base operated by nextSource in New
York. In Charlotte, a comparable senior level analyst would bill for just under $75 per
hour.
For Molly Marshall, getting a job last year at RSI in Jonesboro meant being able to stay
near family. Marshall, 23, was working as a waitress after graduating last spring with a
four-year IT degree from Arkansas State. She has a sister in town, and her parents are less than 60 miles away.
"I'm really close to my family," Marshall said. "I like being able to see them pretty much
whenever I want to."
One of her first projects was for a client that she said came to RSI after a bad offshoring
experience.
"It will help keep jobs in America," Marshall said.
In Greenville, academics and economic-development officials eagerly welcome RSI. East
Carolina University is helping with market analysis and identifying potential employees,
including students and recent graduates.
"If you want to do some fairly high-level IT-oriented work, there aren't a whole lot of
companies in Greenville that can use your services," said Rick Niswander, dean of the
ECU College of Business.
RSI changes that, he said.
White said she has heard from 30 states that are eager for her approach to job creation.
"I used to believe it was more Southern, but I don't anymore," she said. "In every state,
there are areas that have prospered, and areas that have not."
RSI will open in the Pitt County Development Commission's technology incubator. The
red-brick building used to be a shirt factory -- work that long ago moved to lower-wage
workers overseas. |
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